Catching the Bounce

We are all aware of the massively bearish outlook on the S&P (ES1!) due to everything from the china crisis to sinking oil prices. But when should one try to cash in on this trend? From experience, its never wise to 'catch a falling piano', i.e. try to predict the rebound, however, if look at levels of support, we may be able to catch a retracement. We are quickly approaching this level of support at about $1871.25.

Recall the rally when oil futures (CL1!) traded below $30 a barrel (see attached link). This was caused by massive short covering, and we'll see the same in ES1! once its respective level is breached. After that? Well, the news has not given any indication for a turnaround anytime soon. So if you're longterm outlook is bullish, be prepared to pull an 'Aquaman' and to hold your position underwater for quite a bit.